Decentralised finance can increase economic freedom, Bitcoin.com chief says

The successful IPO of chip maker GlobalFoundries reflects Mubadala Investment Company’s strategy to shift investments towards industries of the future, such as technology, life sciences, mobility and renewables, its chief executive said.

The Malta, New York-headquartered semiconductor manufacturer is set to grow significantly in the coming years, in line with emerging industries and as demand for chips soars, Khaldoon Al Mubarak, chief executive and managing director of Mubadala, said in an exclusive interview with The National in New York on the day of the debut of GlobalFoundries' shares.

The world's third-largest semiconductor manufacturer raised $2.6 billion last week in the US initial public offering and is in a strong strategic position to capitalise on its network across the world in line with emerging industries and growing demand for chips, Mr Al Mubarak said.

The share listing is part of Abu Dhabi’s strategy to move towards sectors that “power the trends shaping tomorrow”.

Mubadala is the majority shareholder of GlobalFoundries.

“We are investing a lot of time and capital in these sectors. We see these areas with many tailwinds … Mubadala is well-positioned to take advantage of these industries and shift away from those with headwinds,” Mr Al Mubarak said.

“We are proud of what GlobalFoundries has accomplished. Now it is very well-positioned and has a diversified platform with assets spreading across [the] US, Germany and Singapore that gives it a unique advantage,” he added. “Results speak for themselves, the valuation that we [GlobalFoundries] have achieved is very good. The company’s capabilities and operational performance have been very strong.”

The IPO of GlobalFoundries gave the company a market value of nearly $26bn. The company's listing is the third largest in the US this year after South Korea's e-commerce company Coupang, which raised $4.5bn and Chinese ride-hailing company DiDi that reaped $4.4bn.

Decentralised finance (DeFi) could be the most effective way to increase economic freedom, which in turn would accelerate the pace of innovation and improve the lives of billions of people, Bitcoin.com's chief executive has said.

DeFi – a system by which financial products become available on a public decentralised blockchain network – is open for anyone to use, rather than going through middlemen like banks or brokerages, and does not require proof of identity.

Adopting this can lead to a more inclusive economy, including promoting the ease of doing business, free trade with other nations, regulation of the labour force and stability of currencies.

"A decentralised and permission-less everything is the most effective way to help economic freedom. In places with more economic freedom, people have a higher standard of living and are happier," Roger Ver said at the Fantom Developer Conference in Abu Dhabi on Tuesday.

Evangelists of DeFi argue that it is a safer way of maintaining assets and conducting transactions, and it has been seen as a scenario of a world without banks.

The DeFi market owns only 5 per cent of the cryptocurrency space, but is growing. CoinGecko data shows that there was $93 billion worth of DeFi assets as of June 2021. As of Tuesday, it was up 66 per cent at $154.9bn.

However, Changpeng Zhao, the chief executive of the world's largest crypto exchange Binance, recently said that cryptocurrency regulatory frameworks could take "decades" to implement.



The International Monetary Fund, along with governments and other global organisations, said it is looking at both the risks and opportunities that digital currencies pose.

Countries with a higher standard of economic freedom enjoy several advantages, including a flexible market structure that attracts more investment, higher per-capita income, life expectancy and literacy, improved environmental protection, fewer wars and conflicts, higher self-reported happiness and less corruption and bribery.

In Heritage.org's 2021 Index of Economic Freedom, Singapore is ranked first with the UAE in 14th position. In a recent Brand Finance report, the Emirates came ahead of the US and UK as one of the "world's strongest nation brands".

Starting a business would also be easier with DeFi, but Mr Ver advised to do it in a country that is "welcoming and friendly" to this sector, such as the UAE, which he says, has "rolled out the red carpet" for players in the space.

"The UAE offers its people more control and has a good track record. It is on track, if it hasn't been already, to be among the Tier-1 cities to lead humankind in the future," he said.

DeFi also offers higher returns, with interests "north of 10 per cent" compared to traditional lenders, he said. "I'm crypto-agnostic; anything that works for me is good so let's all work together towards more economic freedom."